There are more things in heaven and earth

August 31, 2007

Recently, some mystery investor placed a $1 billion bet that the European equivalent of the Dow Jones would plunge by 1/3 by the end of September. A few days later, another mystery investor made a $4.5 billion bet that the S&P 500 would lose half its value by September 21. Half the value of the US stock market, evaporating in the next three weeks-- and if they're wrong, they're out $4.5 billion.

These are effing massive bets. They're unprecedented, huge, unlikely-- and they positively scream "inside information". In view of the insider trading just before 9/11, in which bets were made that United and American Airlines stock values would fall, these new gigantic bets have been nicknamed "bin Laden trades".

(If you want to hear an expert trader and economist talk about this issue, go to minute 32 in this podcast and you can hear Max Keiser chatting about it. I've been struggling to understand the details all week, and have taken a lot of my thoughts from this podcast.)

Another false flag terrorist attack on the US would seem to be a sensible first thought, especially since Chertoff hinted we were about to have another terrorist attack, Ron Paul thinks it's likely (and that it will be followed by martial law), and because Cheney designated the Iranian military "terrorists" (paving the way to blame it on the Iranians). The problems with this theory are: 1) why would it also affect the European markets so strongly? and 2) only nuclear weapons would cause a 50% loss in 3 weeks.

Second theory: Saudi Arabia is about to announce it is past peak oil production and that it will be reducing oil exports substantially. The Saudis are some of the only people on earth who have enough money lying around to make these bets. It's only perhaps 100 individuals on earth who could have made this trade, or certain agents within major governments, or large banks. It isn't a long list. Of course, the Saudis are also possible suspects if you lean toward the false flag terrorism theory. The 911 hijackers were mostly Saudi, and Princess Faisal (wife of "Bandar Bush," the Saudi ambassador to the US) sent $400,000 to the hijackers in San Diego right before 911. The House of Saud and the Bushes are very close.

Third theory: because of actions taken by China, or because of actions taken by the US government to shrink our debt in real terms, or because the Powers That Be want to kill the dollar and bring in the Amero, the US dollar is about to collapse. The Chinese government might dump its dollars suddenly, or the American government might announce a "revaluation" of the currency, and everybody on the planet will want to get the hell out of US securities as fast as they can. A total stampede for the exits will ensue, resulting in both US Treasuries and US stocks utterly tanking.

Fourth: a major bank is about to announce that they are wiped out, which might or might not result in horrific stock market carnage. This would be a Hail Mary pass, a last bid to recover some capital by gambling on an unthinkable fall in the markets. In this scenario, the prime suspect (according to the podcast above) would be Deutsche Bank. Deutsche Bank is 1) insolvent and 2) implicated in the pre-911 insider trading, because they owned the investment firm which transacted those trades. Although the mystery investor stands to lose $4.5 billion, it only took somewhere around $1 billion to place this bet. Even so, Deutsche (according to the podcast) engages in very risky trading behavior and has so little cash reserves that they might not have $1 billion. And one bank failure, however enormous the bank is, does not seem likely to crash the S&P by half. In the Great Depression stocks lost 83% of their value, but that took 4 whole years, and we're talking 3 weeks here.

Whatever we might hypothesize, it doesn't look good. If you have ever considered buying gold, or putting aside 3 months of food, or stocking the basement with whiskey and gunpowder-- in short, anything that could be deemed "survivalist"-- this ought to be a kick in the pants to get it done, and tout de suite. Hopefully some knucklehead is about to lose $4.5 billion. If not, there's an unknown catastrophe on the horizon.

UPDATE (Sept 1): OPEC is meeting on September 11 to determine their rate of oil production. Supposing there is a major problem with Saudi oil, such a thing might be announced at one of these meetings.

As far as oil goes, though, it would be a bigger deal if we bombed Iran. If we launched a major attack, Iran would shut down the Strait of Hormuz, resulting in a 40% drop in the world's oil supply.

If something disastrous is indeed about to happen, I am leaning toward oil disruption. This would explain why both the US and European markets would be hard hit, with the US markets taking the worst damage because we are far more dependent on cheap oil than Europe. I don't think bank failures or terrorism could cut the S&P in half in three weeks, nor can I see why China or the US would choose to destroy the dollar this month.

August 28, 2007

The bad news from the post-bubble world is coming in fast and furious. Five days ago I mentioned that 135 mortgage lenders have gone bankrupt in the past year, and already that number has risen to 142 (or, by the time you read this, probably more).

[S]ome of the recent casualties: American Home Mortgage of Long Island, bankrupt August 6th… Home Banc of Atlanta, bankrupt August 10th… and Aegis Mortgage of Houston, bankrupt August 13th.

Now, according to Merrill Lynch, there's another candidate for failure which is many times larger — Countrywide Financial.

The company has exhausted its $11.5 billion in credit lines. It has just received another $2 billion capital infusion from Bank of America. And it's still not enough.

Indeed, one top Bank of America executive privately believes that up to
ninety percent of the country's Alt-A mortgages, a staple of Countrywide Financial's business, will eventually default. If so, it will easily crush all the cash and credit of many Countrywides. (source)

A tremendous amount of rule-breaking and rule-rewriting is going on at the Fed in an attempt to pump more money into the system and prop up decimated mortgage-based securities. For instance, banks can't lend money to investment firms they own, since that would involve taking taxpayer-insured money (i.e. cash insured by the FDIC) and giving it to themselves to spend on hedge funds, CDOs, currency gambles or whatever. If they were to waste FDIC-insured cash in a futile attempt to prop up their failing hedge funds, WE would end up footing part of that bill, even though WE never stood to gain from those investments. That's why there's a rule! Except... well, okay, Bank of America can lend money to itself, the Fed decided. And a couple of days later... well, sure, okay, JP Morgan Chase gets special dispensation, too. Bailout Bernanke Sez: This is no time for rules, people!

[C]apitalism without financial failure is not capitalism at all, but a kind of socialism for the rich. - James Grant, Grant's Interest Rate Observer (source)

Unemployed auto workers can go screw themselves-- That's Capitalism. People who have medical emergencies and can't pay their mortgage-- That's Capitalism. Folks who get their car repossessed in suburban hell where there is no public transportation, and they can't get to a job-- That's Capitalism!

Hedge fund guys get greedy, take huge risks and lose everything? Oh my god, get them some cash, quick! Liquidity injection! Discount loans! Get Bernanke to buy some of their worthless junk at 100 cents on the dollar! Never mind the rules, this is an emergency!

Yep. Socialism for the rich, and the big F You to the poor. It's the American Way... since 1913.

August 24, 2007

I often wonder why it is that one person will question what "everybody knows" and seek their own knowledge (say, about a health issue) while another person simply accepts popular opinion. I've read numerous stories on the internet of people turning their lives around by giving up on their doctor(s) and taking their health into their own hands, mostly through nutrition, supplements, and exercise. On the other hand I know people with chronic health issues which are clearly not going to be resolved by mainstream medicine, and yet, they will not so much as eat a vitamin C tablet without the doctor's say-so. What determines whether a person does their own research, or relies on received wisdom?

It is not higher education which encourages people to question things. In fact, the more education a person has, from what I can see, the less likely they are to question anything. Highly educated people tend to be chock full of the latest received wisdom, because it's a matter of social status to "know" the dangers of high cholesterol, "know" the symptoms of ADHD, "know" that educating children is an incredibly arduous and complex task best left to professionals. They also "know" that the Fed is there to smooth out the highs and lows of the business cycle, which is so Orwellian and opposite to the truth that it hurts me to type it. Another thing highly educated folks "know" is that all the crazy, tinfoil hat theories about 911 have been debunked, and peak oil believers are (sniff, sniff) "Malthusian".

I'd rather talk to a plumber any day.

So what is it, then, that causes person A to type "lipitor dangers" into Google, while person B accepts their doctor's assurance that the strange symptoms cannot be related to the statin drug they're taking? How come some people have been online reading newspapers, shopping, and checking email for years on end, without ever discovering the real power of Google?

My guess is that it's a matter of conformity. Some people feel safer, or feel that they are protecting themselves, by conforming. When "everyone knows" something (that bin Laden planned 9/11, that saturated fat is bad for you, that autism is genetic) then it is pointless, to someone who values conformity, to ask questions. The common wisdom is apparent, and to have any other viewpoint would mean ostracizing oneself in some way, which is not even to be considered.

Following the crowd has probably had enormous benefits in the past. If you'll allow me to be an armchair anthropologist for a moment: Conformity would have been important to survival of both the individual and their group. For about 180,000 years out of the past 200,000, most humans have lived in nomadic hunter-gatherer clan groups. Social cohesion would keep arguments to a minimum, facilitate sharing of resources, and insure that people follow the rules (like not eating meat that smells bad) discovered by their ancestors. For the individual, well, if you get banished you have fewer surviving progeny. When we eventually built sprawling cities, people still lived in multi-generational households, and in ethnically or genealogically segregated neighborhoods. It's only very recently (the past century or two) that we've stopped living in cohesive communities.

The problem is, in the modern environment this helpful desire to conform is not so helpful anymore. For one thing, the crowd does not have your interests in mind. You might go to high school and conform and therefore have greater social capital and a less miserable experience, but it is not like the "in" crowd cares about you, shares resources with you, or will form lasting bonds that assist you when you have small children, or become ill, or are in your dotage. You conform, and you get nothing back from the crowd you're following. (You may, however, develop an eating disorder as a bonus.) The "toe the line" trait is now maladaptive.

Worse, the powers that be-- political parties, Madison Avenue, Big Pharma, and utopian elites like the Rockefellers and Carnegies-- all manipulate the desire to conform for their own purposes, and with astounding success. Pfizer does not have to argue the statistics about cholesterol and Lipitor. If it had to do that, nobody would take the drug. But in fact, Pfizer only needs to put well-crafted ads on TV every night featuring people you want to emulate, and doctors who tap into your desire to follow the leader. Once a critical mass of Lipitor-poppers has been achieved, the drug practically sells itself, because taking a statin becomes a kind of social status symbol, a symbol that you "know" what "everyone knows," that you conform.

Maybe you've heard of the Asch conformity experiments. In a typical experiment, several people were placed in a room and asked
to look at a card marked with lines of different lengths. Supposedly
this was a simple vision test, in which participants were asked to
state (out loud) which line was longest, which lines were of equal
length, etc.

The trick was, everybody was working with the experimenter except one
person, the true test subject. Those who were in on the
experiment (the "confederates") would deliberately give the wrong
answer. For example, even when line A was several inches longer
than line B, the confederates would claim the two lines were of equal
length. The test subject would then be asked their opinion.

32% of test subjects went along with the confederates and gave what was
clearly the wrong answer. That is, about a third of these people told a bald-faced lie in order to conform to the group opinion. If that doesn't bother you, consider doctors who might know the truth about statin drugs; would a third of them also lie to their patients rather than deviate from consensus medical opinion?

Furthermore, this 32% figure was achieved when the truth was obvious and right in front of the person. Imagine that they were shown the card for 30 seconds, and then 20 minutes were allowed to pass, and then they were asked whether the lines were of different lengths. Wouldn't a higher percentage be likely to doubt their own recollection? What if we muddied the waters by asking them something more subjective, something less clear-cut than black lines on a white card? Suppose we showed them two photos and told them to remember which person looked younger, then let 20 minutes pass. What would the rate of conformity be, if people could doubt their own memory and their own subjective assessment?

Many of the subjects in the actual Asch experiments did state the truth, but researchers often noted that they seemed to be in acute distress. Had the situation been any less clear-cut, had it not been for the truth staring them right in the face, these distressed folks might have been happy to go along with the common opinion.

This is why so few people ask questions. They are not about to hold a different opinion, it would be too painful. They would rather not even know there is a contrary opinion out there, because it would be distressing to wind up with an opinion different from the common wisdom.

The problem is that the common wisdom is dead wrong in almost every area, and believing it can cause you unhappiness, bad health, and financial loss, just for starters. Common wisdom is that two people should make enough money right out of college to have a house, landscapers, two SUVs, gorgeous furniture and stainless steel appliances. Thus the dissatisfaction (or alternatively, financial ruin) wrought by this common (if unspoken) opinion, brought to you by Ethan Allen and Pottery Barn. Common opinion in health care is that you should get a flu vaccine every year, you should take Prilosec, you should take Lipitor, you should avoid butter and beef, you should use canola oil in your cooking (all completely unjustifiable). The common belief in the world of finance is that the stock market will suffer just a mild 5% or so correction, when the actual truth is, we're looking at 30-40% declines in the next couple of years, on top of a 20, 30, or 40% decline in the real value of the dollar. Nobody should have money in American stocks right now, but CNBC bobbleheads will never say so.

My argument is, evolution gave us a desire for sugar which is now maladaptive and must be fought, and it also gave us a desire to conform which is now maladaptive and must be fought.

August 23, 2007

I just read a New York Times article explaining that if you lose your home and the mortgage lender writes off your loan, the IRS wants income taxes on the loan amount.

Unbelievable.

We are not talking about debt forgiveness, because the mortgage lender now has the house. That's the whole point of the house being the collateral for the mortgage loan. Now, if your mortgage lender suddenly decided to forget all about your mortgage, but still let you stay in your house, that would be debt forgiveness.

True, the house may be insufficient collateral, because it is worth less than the outstanding loan. But the banks agreed to accept that collateral, so that's their problem. Had lenders not contributed to hyperinflated real estate values by using teaser rates, liar loans, 0% down and other tactics to crowbar people into ridiculous mortgages, they would not now be out that money. Banks and lenders (well... ultimately Alan Greenspan) are the ones who created the giant Housing - MBS - CDO Greed Bubble of 2001-2007. I'm not shedding any tears for the 135 lenders who've gone belly up in the past year.

The IRS, having reclassified every financial transaction they can think of as "income," is now poised to take a crisis (millions of foreclosures, not enough rental property, homeless families) and add to that a bogus tax bill and the threat of jail time. It's like Charles Dickens awoke from the grave and we're back to debtors prison.

(Needless to say, no Wall Street suit pays the IRS for the money that winds up in
their paycheck from the Fed's "liquidity injections".
Only naifs pay the IRS, ha ha ha!)

Bankruptcy will be people's only option, which is, of course, why Congress changed the bankruptcy laws to protect banks and corporations and stab Americans a few more times before it's all over.

What part of "Consumer Spending is 70% of GDP" do these morons not understand?

August 19, 2007

In view of the meltdown currently underway in the financial world-- this time it's The Big One, it would appear-- I hope to do a series of posts on the things that led up to all hell breaking loose, as best as I can make out.

"Leverage" is a word you hear a lot. Suppose you have $10,000, and instead of investing it directly, you use it to take out a $90,000 loan. You then invest all $100,000, ten times your actual capital. You would then have a leveraged position-- using both your own real money, and a bunch of money that in fact does not belong to you. The miracle of leveraging is that if you make a 20% profit on your investments, this amounts to $20,000 instead of a mere $2,000. You pay back the loan, but you still have that $20K, plus your original capital. You've tripled your money (less the interest on the loan).

In the midst of euphoric stock (and other) bubbles, when everyone thinks the market will go up forever, and people start talking about "The New Economy" and "It's Different This Time!" with a greedy, maniacal gleam in their eye, leverage becomes very popular. Why make 10 big ones when you could make 100? Why settle for $100,000 when you could get a loan and make a cool million?

The trouble is that the miracle of leveraging turns into the catastrophe of leveraging if your investments go down in value.

Returning to the above example: you start with $10K, borrow another $90K, and buy some stocks. Now suppose those stocks fall in price by 10%. You have $90,000 left, which is what you owe the bank. You've been completely wiped out. If the stocks fall by 20% you have to somehow cough up another $10,000 just to repay the loan.

What's been happening lately is leveraging on top of leveraging.

Suppose you take your $100,000 (only $10K of which is actually yours) and give it to a hedge fund. The hedge fund takes your $100,000 and borrows another $900,000. The hedge fund manager than gives $1 million to a CDO fund (CDO's are based on pools of mortgages) and the CDO guy borrows another $9 million to buy subprime mortgages.

Now suppose that the default rate on subprime mortgages goes up 1 percentage point unexpectedly.

Okay, now let's multiply that by the amount of leveraging. In my first example where we tripled our money, we were leveraged 10 to 1. (We invested $100,000 but only really had $10,000.) So, when our investments went up 20% we actually made a 10 x 20% = 200% profit.

This time around, that 5% loss has to be multiplied by the CDO guy's leveraging, and the hedge fund guy's leveraging, and our personal leveraging. We have lost 10 x 10 x 10 x 5% or 5000%. This house of cards built on 10,000 measly dollars has just lost $500,000 due to a very minor fluctuation in prices.

Of course, nobody coughs up half a million in lost money. The banks that made these loans simply take the hit. That's what's happening right now. Morgan Stanley lent a bunch of money to Bear Stearns, and then it turned out Bear Stearns' fund was worth 95% less than everyone thought (whoops!!). Morgan Stanley seized Bear Stearns' assets in an attempt to sell them off and get some of their money back, but nobody would buy the Bear Stearns junk. Morgan Stanley was simply out that money.

Because this is happening left, right, and center, with all sorts of multi-billion dollar funds vaporizing into thin air, nobody but nobody can get any loans. Not home owners, not corporations trying to issue bonds, not investment banks with deals gone sour, not mortgage lenders trying to use their "lines of credit" with the major banks. Ain't nobody got any cash anymore.

"Liquidity" basically means "available cash." We are currently in a "liquidity crisis," which is to say, there isn't any. Enter the term "liquidity injection".

A "liquidity injection" is when a central bank (the Fed, in our case, or the European Central Bank, or the Bank of Japan) invents money out of thin air and gives it away to large banks.

No-- seriously! I'm not making this up!

When liquidity dries up, the world of finance comes to a screeching halt like a car engine that's run out of oil. To prevent absolute calamity, the central banks simply say "Okay-- you there-- JP Morgan Chase-- can you get by on $30 billion? No? How's $40 billion?" I kid you not.

Why should we care? Because all this new, hot-off-the-virtual-press money causes the money in our bank accounts to lose purchasing power. Which is to say, a dollar is not what it used to be, because suddenly there are a whole lot more of them. To say that a dollar is worth less is equivalent to saying that prices go up; it takes more dollars to buy the same bread and milk you bought last week. That is, new money means more inflation.

I don't know the exact figure, but in the past 2 weeks the central banks of the major economic powers have magicked well over half a trillion dollars into existence and just given it away.

Liquidity injections still won't solve the problem, however, although they may lessen the disaster. The fact is, if banks don't want to loan money, it doesn't matter how much cash the Fed gives them. Or, if the folks with good credit don't want to take on debt, and don't want loans, then again the Fed is powerless. There's a phrase for this situation, where the Fed stands ready to print money like nobody's business, but the money doesn't go anywhere. It's called "pushing on a string."

August 18, 2007

If you know anybody taking a cholesterol-lowering statin drug such as Lipitor, Zocor, Mevachor, or Pravachol, then please, for their sake, read The Dangers of Statin Drugs by Sally Fallon and Mary Enig. It is full of surprising information (and references), such as:

In every study with rodents to date, statins have caused cancer.25 Why have we not seen such a dramatic correlation in human studies? Because cancer takes a long time to develop and most of the statin trials do not go on longer than two or three years. Still, in one trial, the CARE trial, breast cancer rates of those taking a statin went up 1500 percent.26

Let me repeat that. In one trial, women taking statin drugs were 15 times more likely to get breast cancer than those taking a sugar pill. Gee, I'll bet they never reported that on CNN (the Corporate News Network).

As the article describes, statin drugs do not only block the production of cholesterol. They also block the production of CoQ10, also called "ubiquinone" because it is ubiquitous in the body, being required for energy production in cells. CoQ10 is also an antioxidant, has been shown to prevent cancer, and is critical to proper function of the heart and liver, where it is found in the highest concentrations. Also blocked is squalene, which prevents cancer.

Of course, cholesterol itself is extremely useful in the body.

Nowhere is the failing of our medical system more evident than in the wholesale acceptance of cholesterol reduction as a way to prevent disease--have all these doctors forgotten what they learned in biochemistry 101 about the many roles of cholesterol in the human body? Every cell membrane in our body contains cholesterol because cholesterol is what makes our cells waterproof--without cholesterol we could not have a different biochemistry on the inside and the outside of the cell. When cholesterol levels are not adequate, the cell membrane becomes leaky or porous, a situation the body interprets as an emergency, releasing a flood of corticoid hormones....

Cholesterol is needed to produce vitamin D, sex hormones, anti-inflammatory hormones, bile, scar tissue, and "glucocorticoids" which regulate blood sugar. It's an antioxidant (shocking, no?). It is also necessary for the uptake of serotonin-- meaning that without enough cholesterol, you will feel depressed.

Thus, low cholesterol--whether due to an innate error of metabolism or induced by cholesterol-lowering diets and drugs--can be expected to disrupt the production of adrenal hormones and lead to blood sugar problems, edema, mineral deficiencies, chronic inflammation, difficulty in healing, allergies, asthma, reduced libido, infertility and various reproductive problems.

Well heck, sign me up!

But maybe it's all worth it if it prevents heart disease, right? (Never mind that cancer is now the #1 killer of Americans, NOT heart disease, and statin drugs increase cancer deaths.)

Actually, though, statin drugs don't do that either.

[T]the results of the major studies up to the year 2000--the 4S, WOSCOPS, CARE, AFCAPS and LIPID studies--generally showed only small differences [in the rate of coronary deaths] and these differences were often statistically insignificant and independent of the amount of cholesterol lowering achieved. In two studies, EXCEL and FACAPT/TexCAPS, more deaths occurred in the treatment group compared to controls. Dr. Ravnskov’s 1992 meta-analysis of 26 controlled cholesterol-lowering trials found an equal number of cardiovascular deaths in the treatment and control groups and a greater number of total deaths in the treatment groups.32 An analysis of all the big controlled trials reported before 2000 found that long-term use of statins for primary prevention of heart disase produced a 1 percent greater risk of death over 10 years compared to a placebo.33

Furthermore, statin drugs increase the chances of another kind of heart disease, that of heart failure.

We are currently in the midst of a congestive heart failure epidemic in the United States--while the incidence of heart attack has declined slightly, an increase in the number heart failure cases has outpaced these gains. Deaths attributed to heart failure more than doubled from 1989 to 1997.13 (Statins were first given pre-market approval in 1987.) Interference with production of Co-Q10 by statin drugs is the most likely explanation. The heart is a muscle and it cannot work when deprived of Co-Q10.

Cardiologist Peter Langsjoen studied 20 patients with completely normal heart function. After six months on a low dose of 20 mg of Lipitor a day, two-thirds of the patients had abnormalities in the heart’s filling phase, when the muscle fills with blood. According to Langsjoen, this malfunction is due to Co-Q10 depletion....

To summarize the whole article: Statin drugs are killing people.

This is one of those miserable cognitive dissonance issues. If you were to read the above article carefully and thoroughly, you would have to conclude that statins are causing illness and death (while Big Pharma reaps billions in profits annually). And yet... there are the constant cheery ads on TV. You probably know a dozen or so people taking these drugs, and some of them may be very smart folks. Your doctor will tell you that the benefits outweigh the risks, and the doctor seems like such a nice professional gentleman. CNN, needless to say, will harp on the imagined evils of cholesterol and what tremendous good luck it is that someone invented statin drugs. Even the BBC will agree. Every time you pick up a mainstream magazine, you'll see articles about the dangers of high cholesterol next to ads for statin drugs.

It is very hard to maintain even a scientifically provable belief -- that statins harm health -- in the face of seemingly the entire rest of the world. It is emotionally unpleasant and creates a barrier between you and the friends and family who will think you're crazy (at least initially). It may also seem smug or egotistical, to be convinced of your own opinion when everyone else thinks differently.

It's simply easier to ignore the dissenting opinion on statin drugs. It's far more comfortable to go with the flow, go with the crowd, go with your doctor's advice, go ahead and get that cholesterol blood test, go ahead and get that prescription filled. Everybody else is doing it.

I understand all that, but people need to ask themselves: Would I really rather go to an early grave than question medical authority?

August 06, 2007

"Freedom is the freedom to say that two plus two make four. If that is granted, all else follows."

George Orwell, 1984

It's not difficult to destroy the Cheney administration's claims of what happened on 9/11. All you have to be willing to do is put aside your emotions and expectations, and admit that 2 + 2 = 4.

For years we have scrambled jets whenever a plane went off course and could not be reached. On average this occurs about a hundred times a year. The average response time is less than 10 minutes.

Where the hell were they?

We are told that a guy who couldn't fly a Cessna could nonetheless fly a 757 into the Pentagon, executing a 330-degree turn while dropping thousands of feet per minute, then skimming the ground at an altitude of around 20 feet for hundreds of yards before crashing into the Pentagon. I heard an Air Force Lieutenant Colonel interviewed on the radio, who said that he had found it difficult to fly at 100 feet, let alone 15 or 20. "Ground effect" makes it difficult to control the plane, and in the case of Flight 77, the massive 757 was so close to the ground that no steering would have been possible. Turn the slightest amount and the wingtip goes straight into the lawn. Oh sure, any Joe Blow can do that, eh?

Oh, and by the way, the Pentagon is protected by anti-aircraft missile batteries. No clue, no theory, no idea offered as to why they didn't take down Flight 77. Just simply not mentioned in the media.

Flight 93 crashed into the ground, we're told. Which makes it a bit hard to explain why the debris was spread over an 8-mile area, or why an engine weighing over a ton was found more than a mile from the main crash site. Or why those crazy, delusional Pennsylvanians said they saw two fighter jets on its tail prior to the fireball exploding in mid-air. Lot of whackos in the vicinity of Shanksville, I guess.

The government will tell you that the jet fuel fires in the Twin Towers softened the steel, causing the buildings to "pancake" down into oblivion. Never mind that no other steel-frame high-rise in history has ever collapsed due to fire, not even when burning like a torch for hours (see here for examples). 9/11 Changed Everything-- Even Physics!

It could not be easier to disprove the "fire" theory for the Towers' collapse. Even the NOVA documentary espousing the government's theory leaves the core support columns still standing after the floors have fallen in its computer animation. It never explains why those core columns were nowhere to be seen in the actual event. They know that most Americans are so entranced that they won't even notice.

The government itself (as embodied in NIST, the National Institute of Standards and Technology) admits that most of the jet fuel burned outside the towers, in gigantic fireballs. The rest of it was gone, NIST estimates, in about 20 minutes. NIST contracted Underwriters Laboratories (UL) to build a model of a single floor of the WTC towers, including applying massive pressure to replicate the weight of above floors, and then to subject the replica to intense fires. There were 4 different scenarios that they looked at, but in the "worst case" condition, the floor had not collapsed after 2 hours. Neither of the twin towers burned for 2 hours. Furthermore, in these recreations UL applied only 1/2 inch of fireproofing material, even though, elsewhere in its report, NIST says that an average of 2.5 inches of fireproofing insulation was applied to the columns. And, very importantly, in the actual towers the heat would have traveled throughout the steel frame, with the rest of the building acting as a "heat sink," so that heat could not build up in the specific areas exposed to fire. This "heat sink" effect is one reason why large steel-frame buildings have always, always until September 11, survived fires.

NIST claims that much of the fireproofing was knocked off of the steel columns and beams when the planes hit. If this were the case, only some columns would have lost fireproofing, and these would have failed first, resulting in an asymmetric collapse (i.e. the building would have toppled over). This argument is moot, however, as NIST also admits that a chemical analysis of the paint applied to the steel, as well as metallurgical analysis of the steel itself, indicates that no steel recovered from the fire zone had ever reached 600 degrees Centigrade, which-- right there, right in NIST's own words-- means that structural collapse would have been impossible. At 600 degrees C the steel would have lost roughly half its strength, but the building was designed such that the steel frame could hold ten times the weight it was actually expected to hold. In other words, we would expect collapse at 90% loss of strength, but not 50% loss of strength-- and it never got as bad as a 50% loss of strength. In fact, the paint analysis indicates that steel temperatures did not exceed 250 degrees C.

Now, sure, you don't want to take my word for it, you would want to read through the NIST report and find out whether I've got this all straight. (I warn you, having skimmed large sections, that their intent is clearly to bore the pajamas off any American who dares to read the thing.) But, supposing that you were to take me at my word on this, as a kind of thought experiment-- at this point we should realize that explosives / incendiaries must have been used to bring down both towers. I don't care how unpalatable it is. It is the only other explanation.

But how could explosives have been brought into the building and positioned? Well: 1) the security firm responsible for the World Trade Center was overseen by both Marvin Bush and a first cousin of the President; 2) bomb-sniffing dogs were called off 5 days prior to 9/11; 3) the weekend before 9/11 they had an unprecedented total shutdown of all electrical power in both towers for maintenance purposes; and 4) they had an unusual number of evacuation drills in the few weeks before 9/11. Also, the US military holds a patent on a particularly nasty form of "thermate" which is capable of burning through an inch of steel in 8 seconds.

The demolition theory is really not so surprising, since fire fighters commonly reported numerous explosions. Some specifically said it was just like controlled demolition. Some can be heard in radio recordings, calling for help after explosions went off inside the building, minutes before the South Tower fell. One fire fighter remembered finally getting ahold of his dad by cell phone, to tell him that he'd been downtown, but he'd survived. His dad said (roughly): "You mean you were there when that building fell down?" He said: "No. I was there when the building exploded."

And if you don't buy it when it comes to the first two towers (although, believe me, I'm only mentioning the surface of the evidence for explosion / demolition) you will find it extremely hard to explain how in the hell building 7 came down. 47 stories, no jet planes, isolated fires on a couple of floors-- and whammo, at 5:20pm on 9/11 it comes down at free fall speed, just like the towers. No resistance. Perfectly symmetric. And the government has no hypothesis! FEMA said the building's collapse was of "low probability," and NIST has yet to hand in its report on WTC 7.

I mean, just watch the damn thing. Just go here and watch WTC 7 coming down. Does it or does it not look like an outdated Vegas casino?

And if that still doesn't convince you, just go here and listen to the building's owner admit that they demolished the building intentionally.

Oh, and by the way. There were millions of dollars' worth of "put options" placed on United Airlines, American Airlines, Morgan Stanley, and other companies badly hurt by 911. (Not, however, on any other airlines.) A "put option" is a bet that the stock price of a company will fall. Many of the put option deals were brokered through the bank A. B. Brown in Chicago, and where such accounts were partly managed by "Buzzy" Krongard. A. B. Brown has been implicated in money laundering related to the drug trade, which, if you're smart, you will know means the bank is associated with the CIA. And indeed it is. "Buzzy" Krongard, of put options infamy, was the #3 man in the CIA.

On the government's side we have this argument that the Boogey Man (hereafter referred to as "Osama bin Laden") was able to evade the American military and decimate steel towers with nothing but kerosene, all from a cave in Afghanistan while dying of kidney disease.

August 05, 2007

I ran across a great essay by Paul Craig Roberts, who is currently one of the major anti-war and anti-neocon voices out there on the Internet. In Gullible Americans, written in August of 2006, he writes:

I was in China when a July
Harris Poll reported that 50 percent of Americans still believe
that Iraq had weapons of mass destruction when Bush invaded that
country, and that 64 percent of Americans still believe that
Saddam Hussein had strong links with Al Qaeda.

The Chinese leaders and
intellectuals with whom I was meeting were incredulous. How
could a majority of the population in an allegedly free country
with an allegedly free press be so totally misinformed?

The only answer I could give the
Chinese is that Americans would have been the perfect population
for Mao and the Gang of Four, because Americans believe anything
their government tells them.

Americans never check any
facts. Who do you know, for example, who has even read the
Report of the 9/11 Commission, much less checked the alleged
facts reported in that document? I can answer for you. You
don’t know anyone who has read the report or checked the facts.

. . .

How do you know that 9/11 was a
Muslim terrorist plot? How do you know that three World Trade
Center buildings collapsed because two were hit by airliners?
You only “know” because the government gave you the explanation
of what you saw on TV. (Did you even know that three WTC
buildings collapsed?)

. . .

Some readers will write to me to
say that they saw a TV documentary or read a magazine article
verifying the government’s explanation of 9/11. But, of course,
these Americans did not check the facts either--and neither did
the people who made the documentary and wrote the magazine
article.

. . .

Scientific evidence is a tough thing for the American public
to handle, and the government knows it. The government can
rely on people dismissing things that they cannot understand
as "conspiracy theory."

. . .

There was also the “foiled plot”
to blow up the Holland Tunnel and flood downtown New York City
with sea water. Thinking New Orleans, the FBI invented this
plot without realizing that New York City is above sea level.
Of course, most Americans didn’t realize it either.

For six years the Bush regime
has been able to count on the ignorant and naive American public
to believe whatever tale that is told them. American
gullibility has yet to fail the Bush regime.

The government has an endless
number of conspiracy theories, but only people who question the
government’s conspiracies are derided for “having a conspiracy
theory.”

David Ray Griffin, a philosophical theologian who has authored over 20 books, makes a compelling case that 9/11 has become a "sacred myth" of the American people, and thus it amounts to sacrilege to question the tale. Here you can find the transcript of a speech he gave in Oakland, CA in March 2006, and you can download the MP3 there too. Dr. Griffin is a good speaker, and I highly recommend downloading his speech.

Dr. Griffin says that one of the biggest reasons the American public does not question 9/11 is that they simply don't believe that members of their own government would do such a thing. ("9/11 was an inside job" is the motto of the 9/11 Truth Movement.) This faith in those in power, as Dr. Griffin goes on to explain, is a historically wrong belief.

I couldn't agree more. Typically when the government wants to go to war, it (or some faction within it) kills Americans and blames it on the enemy. It's just the way wars are done, whether you are FDR or Hitler. It ought to be old hat to us all.

Consider these incidents: The Navy sinks the USS Maine and blames it on Spain, and so begins the Spanish-American war in 1898. We load up a passenger ship with arms and munitions, then leak information on the secret cargo to the Germans, resulting in the sinking of the Lusitania, leading the US into WWI. Having broken Japanese military encryption codes 6 months before, FDR actually facilitates the bombing of Pearl Harbor. Kennedy's Chairman of the Joint Chiefs of Staff suggests various scenarios for bringing us to war with Cuba, including blowing up hijacked planes, carrying out attacks in Miami, or even setting off a bomb in Washington, DC. (Kennedy fires him, thankfully.) The Gulf of Tonkin was faked, and although the Navy did not slaughter its own soldiers in this instance, the ruse of an attack by our enemies was the same.

Among non-American incidents, Hitler dressed up Germans in Polish Army uniforms, drove them to a spot near the border with Poland, shot them dead, photographed them, and claimed there had been an aggressive Polish incursion into Germany. Thus began Germany's invasion of Poland. He also burned down the Reichstag and blamed it on Communists in order to seize greater powers. In Russia, as Paul Craig Roberts writes about, the authorities would carry out bombings and then frame the dissidents they wanted to arrest. And, of course, Israel is famous for "false flag" operations, doing things like blowing up Berlin night clubs, then framing Libya.

And although I can't possibly do justice to this story, I must mention that during the Cold War, NATO operatives blew up hundreds of people in a series of bombings across Europe, all of which were blamed on radical leftist communist groups. The bombings constituted NATO's "Operation Gladio" project, carried out along with the CIA and MI-6 (the British CIA). They blew up civilians in train stations and public squares in order to give more surveillance power to governments, as well as to drum up support for Cold War efforts. (Operation Gladio has been investigated by numerous European governments, and a resolution condemning the program was passed by the European Parliament in the early 1990's. You could also check out NATO's Secret Army by Daniele Ganser... I have not read it yet, but it's well known.)

As for 9/11, the evidence of government foreknowledge, assistance, and cover-up is substantial, if only people would put aside the idea that "they would never do that". Yes, they would. There is plenty of evidence, if only people will dare to look.